Syrian pound continues to weaken

There are growing signs of public nervousness in Syria. Among others, this is being reflected in a weakening Syrian pound as the demand for the dollar goes up.

There are growing signs of public nervousness in Syria. Among others, this is being reflected in a weakening Syrian pound as the demand for the dollar goes up.

Despite measures to support the local currency, the Syrian pound traded at 56.60 pounds to the dollar on the black market Wednesday, down from 54 to the dollar a couple of months ago, weakening the buying power of the local currency, the AP reported. The exchange rate was 52 pounds to the dollar in February, prior to the assassination of former Lebanon's Premier Rafik Hariri. This represents nearly a 10 percent drop in the pound's value in a period of nine months or more than 1 % per month.

Earlier this week, Governor of Syria's Central Bank Adib Mayyallah declared that Syria decided to raise the interest rate on the short-term and medium-term deposits by half a percentage point in a bid to strengthen the local currency. In addition, Syrian monetary authorities have decided to authorize foreign commercial transactions in euros, rather than just dollars, in an attempt to ease demand for the dollar, the official daily Ath-Thawra reported.

In one of its recent meetings, the Syrian cabinet has adopted a series of financial and banking decisions as part of the attempts to confront pressures on the Syrian pound. The decisions provide that the state will continue to fund trade transactions though an effective organization of funding the imports by means of credit cards. For the first time in Syria, banknotes were also allowed to be used in banking transfers within certain limits.

Beyond all these measures, it seems Syrian authorities are already preparing for the possibility of international sanctions as a result of the ongoing crisis with the UN. While Syria's deputy prime minister for economic affairs, Abdullah al-Dardari stated that Syria "cannot be broken," he also added that "It is wise that a person know what he's facing." International economic sanctions will further deteriorate the value of the Syrian pound.